EDGE BrightBridge in Chattanooga becomes first CDFI to go statewide

EDGE BrightBridge in Chattanooga becomes first CDFI to go statewide

Bridging the lending gap for small business

January 1st, 2018 by Dave Flessner in EDGE

President and CEO Mike Ohlman poses in the Brightbridge office on Tuesday, Nov. 7, 2017 in Chattanooga, Tenn.

Photo by C.B. Schmelter

President and CEO Mike Ohlman poses in the Brightbridge office on Tuesday, Nov. 7, 2017 in Chattanooga, Tenn.

President and CEO Mike Ohlman poses in the...

Photo by C.B. Schmelter

BrightBridge at a glance

Started: 1981 as Chattanooga/Hamilton County Development Corp.

Name: BrightBridge name was adopted in 2009

Ownership: A private, non-profit lending corporation that is self-funded from its loan fees and operates as one of five Community Development Financial Institutions in Tennessee to make Small Business Administration and USDA loans and other activities.

Focus: To fill lending gaps for business and non-profit borrowers to foster economic growth throughout Tennessee and in parts of North Alabama, North Georgia and western North Carolina.

Slogan: “Capital vision for your vision”

Assets: $8.3 million

Net worth: $3.7 million

Staff: CEO Mike Ohlman oversees a staff of 15 employees

Location: 535 Chestnut Street in downtown Chattanoogawwww.brightbridgeinc.org

Web site: www.brightbridgeinc.org

More Info

BrightBridge loan programs

* SBA Community Advantage loans for small and startup businesses

* SBA 504 program for businesses unable to secure conventional financing

* CDFI program to make business loans in targeted low-income areas and targeted populations in Tenness and Georgia

* Brownfield revolving loan fund to clean up contaminated sites

* HUD 108 loans for gap financing

* New markets tax credits for projects in low-income areas

* USDA intermediary relending program for small and startup businesses in targeted areas

Dustin Choate, a Winston-Salem, North Carolina, native, brought North Carolina's early fervor for craft beers to North Chattanooga in December 2006 when he opened Tremont Tavern in a former restaurant site where a number of stores had tried and failed to make a go. Choate made his bar smoke-free, and soon developed a menu of burgers and other items that proved so popular that crowds often exceeded the bar's capacity.

So two years ago, Choate decided to nearly double the size of Tremont Tavern by expanding into adjacent space. But like most restaurateurs in leased facilities, Choate found he couldn't get a conventional bank loan with limited collateral to fund the expansion.

The solution to Choate's business expansion came from a nonprofit lending agency that pioneered Tennessee's first SBA Community Advantage loan program to provide loans for small businesses without traditional collateral required for bank loans. BrightBridge, an SBA lending agency, arranged a $150,000 SBA loan at a 7.25 percent rate to help fund the bar expansion.

Since then, BrightBridge has made at least a dozen and a half other such Community Advantage loans along with its growing portfolio of SBA lending options to help small and startup businesses gain access to capital needed for growth.

BrightBridge is a non-profit lending corporation that was created nearly four decades ago. Since then, BrightBridge has earned accolades from both government and bank sponsors for its SBA loan and credit programs.

Last year, the Tennessee SBA district office recognized BrightBridge as the top dollar and loan volume provider for the Community Advantage program in the state and the top lender in Tennessee for the ninth-consecutive year for the 504 loan program, another SBA loan program that allows BrightBridge to participate with commercial lenders on larger projects involving real estate, construction and heavy machinery.

Last July, BrightBridge was certified as a Community Development Financial Institution and is raising $30 million from banks and other funding sources for other lending activities.

At the end of 2017, the SunTrust Foundation recognized BrightBridge as one of 30 nonprofit organization across the Southeast — and one of only two in Tennessee — to share in $800,000 in its "Lighting the Way" grants for non-profits that help individuals move from financial stress to confidence.

Mike Ohlman, president and CEO of BrightBridge, said Brightbridge provides a private sector approach to making SBA loans and helps to counsel and mentor businesses for growth. Ohlman said BrightBridge makes business loans in a variety of industries and tries to complement, not compete, with local banks and other commercial lenders.

BrightBridge is the first lender to make Community Advantage SBA loans in Tennessee. Such loans can be up to $250,000 and usually don't require as much collateral as other small business loans.

"For the community advantage program, our appeal is that instead of saying 'no' to a loan, we find a way to make it work," Ohlman says.

BrightBridge makes the loan and generates fee income from the loan processing. But the nonprofit lender is not a depository institution so banks can work with BrightBridge to help their customers grow and still handle their checking and other banking services, Ohlman said.

BrightBridge has done more than $3 million of Community Advantage loans since the program expanded to Chattanooga in 2015.

Ohlman, who joined the organization a decade ago and has been its president for the past two years, brings both public and private experience to the job at BrightBridge and reflects the dual purposes of the agency. Ohlman worked for 15 years in the Tennessee Department of Economic and Community Development and served as a city president at Regions Bank in Paris, Tenn.

At BrightBridge, borrowers are offered both financial and counseling assistance and are able to tap into a variety of SBA programs that often fill the gap for startup and small businesses unable to secure conventional bank loans.

"One of the biggest challenges that bankers and other commercial lenders see is that the borrowers are not ready," Ohlman says. "They need help to get ready and that's what we try to provide to help businesses put together a business plan and figure our how to best structure a loan for their benefit, if money is needed."